Answer to Question #135871 in Economics of Enterprise for Hadgu

Economics of Enterprise

Question #135871

Given a short run cost function as TC=1/2Q2+40Q, find the minimum value of AVC and MC.

Expert's answer

If TC = 1/2Q2 + 40Q, then:

AVC = VC/Q = 0.5Q + 40,

MC = TC'(Q) = Q + 40.

So, the minimum value of both AVC and MC is 40 at Q = 0.

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